Babcock to spend 10 million sterling on Brexit restructuring

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Babcock International CEO Archie Bethel during an interview in London, Britain February 6, 2019. REUTERS/Hannah McKay

LONDON (Reuters) - Britain’s Babcock put the cost of restructuring its European business for Brexit at 10 million pounds ($13 million) a year to guarantee it would retain flying rights to provide emergency medical and fire fighting services across the bloc.

Babcock, a key supplier of engineering and defence services to Britain’s ministry of defence, has had to join the likes of easyJet and British Airways-owner IAG in restructuring in case Britain leaves the European Union without a trade deal.

The British company, which will also take a one-off exceptional cost of 10 million pounds to restructure, has had to sign partners in European markets where it operates to make sure those businesses are majority owned by EU nationals.

That enables it to secure an air operating certificate.

Babcock, which also maintains nuclear submarines and defence vehicles, is also taking a second exceptional charge of around 30 million pounds due to an adjustment to its pension liabilities.

The group said underlying earnings expectations for the financial year ending March 31 remained unchanged as an improved margin helps to offset a slight drop in forecast revenue of 5.2 billion pounds from 5.36 billion pounds last year.